Fed Chairman Powell: Bitcoin is likely to replace the US dollar as the world's reserve currency, and the current regulatory system is powerless to Libra.

On Thursday, Federal Reserve Chairman Powell reiterated concerns about Facebook's cryptocurrency Libra at a Senate Banking Committee hearing. He expects Libra to be an important topic at the upcoming G7 finance ministers meeting.

Powell is concerned that Libra will trigger money laundering, financial instability and user privacy issues.

Powell told members of the Senate Banking Committee that "no single institution can stand up to monitor this. We don't have the right to apply the privacy rules that apply to banks to Facebook or Libra."

He told the committee chairman Mike Crapo that the government may need to establish a new regulatory body to solve this problem. Because "in our current regulatory system, it is clear that there is no such thing we need."

He also said that "the size of the Facebook network means that it may be largely systemically important. This should be subject to the highest level of privacy protection and prudential supervision."

Also at today's hearing, legislators expressed concern about the threat posed by bitcoin and other cryptocurrencies to the financial system and the potential challenges of bitcoin replacing the dollar.

Powell said he doesn't think Bitcoin is a widely used payment method. However, he pointed out that in the global economy, Bitcoin has increasingly replaced gold as a value reserve. Powell acknowledged that it is possible to replace Bitcoin in US dollars in the long run. He also stressed that the United States should not believe that the status of the dollar as a reserve currency will last forever.

According to the report, Powell also said at the hearing of the House Financial Services Committee yesterday that "Libra may have an impact on privacy, money laundering, consumer protection, financial stability and other issues. These concerns should be thoroughly and publicly resolved. We I hope that the innovation of cryptocurrency can be carried out in a safe and healthy way."

According to Reuters, Powell also expects Facebook's Libra project to be an important discussion topic at the G7 finance ministers and central bank governors meeting next week.

Bank of England Governor Mark Carney also commented on Facebook's cryptocurrency Libra. He said, "If it succeeds, it will become systematic, because it will involve a large number of users. It must be working properly, no problems. Can not let money be lost from people's wallets."

Other issues that he believes Libra needs to consider include the absence of any underlying risks when transferring funds into and out of money, how to manage underlying assets, and how to deal with issues related to money laundering and terrorist financing. Libra "must be rock solid from the start, otherwise don't start."

The French Finance Minister Bruno Le Maire also reiterated his opposition to Libra's idea of ​​becoming a "sovereign currency." He said, "I want to make sure that Facebook's Libra project won't be a sovereign currency that can compete with the national currency. Because I will never accept the company as a private kingdom."

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By Xiu MU

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